Tuesday Newspaper Review - Irish Business News and International Stories - - July 29, 2014
By Finfacts Team
Jul 29, 2014 - 12:03 PM

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Irish Independent

HOUSEHOLDERS are to be hit with a higher-than-expected increase in the levy on their electricity bills.

Last month the energy regulator said the levy would rise by 47pc, but in a final decision it has now been decided to increase the levy by 50pc.

This will take to €73 per household the cost of the levy, which is in place to subsidise wind and peat-produced power. And the levy will impact on households irrespective of how much electricity they use. The Commission for Energy Regulation said the new higher levy would take effect from October 1. It goes from €42.87 per customer to €64.37 – an increase of €21.50 per household.

But when valued added tax (VAT) is added, the levy comes to €73.06 per bill over a year, according to calculations by David Kerr of price comparison site

The higher public service obligation (PSO) levy is being imposed despite a fall in the wholesale cost of generating electricity. Mr Kerr said the levy was due to generate €335m this year.

COUNCILS will eventually have the ability to set their own rate of property tax at whatever level is required for their local budgets, according to Public Spending Minister Brendan Howlin.

From next year, local authorities will have the power to cut or increase their property tax rate by 15pc, when the proceeds of the tax go direct to councils.

But Mr Howlin would like councils to have even greater flexibility to set the rate.

"Personally, this is entirely personal, I wouldn't have any restriction on it. They make up their mind, yeah. They decide. That would be my view over time," he told the Irish Independent.

Homeowners in Dublin are in line for a full 15pc cut in their property tax in 2015.

In another eight council areas around the country, householders can expect a reduction of up to 15pc, according to draft calculations for the Government.

Taxpayers could save up to €375m a year if European leaders back a deal to allow Ireland pay off just a share of the International Monetary Fund (IMF) bailout loans early, Finance Minister Michael Noonan said.

The proposed deal would see Ireland raise cash on the markets to repay €15bn of the more than €22bn that the Government owes to the IMF. It comes after the international rescue fund hiked interest rates to almost 5pc, compared to little more than 2pc on the markets.

The deal would shave €20m to €25m of interest from every €1bn refinanced, the finance minister said. On €15bn that saving would add up to between €300m and €375m a year.

The plan is "certainly worth doing," Minister Noonan said.

The scheme will require sign- off from all euro zone member states as well as the UK, Sweden and Denmark because contracts on their share of the 2010 bailout loans mean that currently the debts all have to repaid at the same time, he said.

Irish Times

A former official with the National Asset Management Agency (Nama) has had criminal charges brought against him in relation to property dealings he allegedly influenced while working with the agency.

The Irish Times understands the man was previously questioned by gardaí about suspect property dealings and that he met with detectives by appointment at a Dublin Garda station yesterday as part of the latest stage in the investigation which has been ongoing for two years.

He was charged and has since been released on bail. The man, who lives in Dublin and has moved on from his position in Nama, will appear in court at a later date.

Paul Krugman: In recent decisions, the conservative majority on the US supreme court has made clear its view that corporations are people, with all the attendant rights. They are entitled to free speech, which in their case means spending lots of money to bend the political process to their ends. They are entitled to religious beliefs, including those that mean denying benefits to their workers. Up next, the right to bear arms?

There is, however, one big difference between corporate persons and the likes of you and me: On current trends, we’re heading toward a world in which only the human people pay taxes.

We’re not quite there yet: the US federal government still gets one-tenth of its revenue from corporate profits taxation. But it used to get a lot more – a third of revenue came from profits taxes in the early 1950s, a quarter or more well into the 1960s. Part of the decline since then reflects a fall in the tax rate, but mainly it reflects ever more-aggressive corporate tax avoidance – avoidance that politicians have done little to prevent.

Tesco had its worst sales decline in two decades, Kantar Worldpanel data showed today, a week after Britain’s largest supermarket company said it will replace chief executive officer Philip Clarke.

Tesco’s sales fell 3.8 per cent in the 12 weeks ended July 20, the steepest decline since comparable records began in 1994, the research company said today.

The retailer’s share of its domestic market fell 1.4 percentage points to 28.9 percent.

Irish Examiner

When the European Central Bank unleashed a stimulus barrage in June, it cautioned the economy would take some time to respond. Data due this week may test its patience.

The inflation rate remained at 0.5% for a third month in July, according to the median forecast of 42 economists in a Bloomberg survey.

The unemployment rate remained unchanged at 11.6% in June, a separate survey shows. That may fuel policymakers’ concern that annual price gains will become entrenched at a fraction of the ECB’s goal of just under 2%, and increase calls for further action.

The ECB unveiled a range of measures including a negative deposit rate and targeted long-term loans last month. While the package has helped push the average yield on bonds from Europe’s most-indebted nations to a record low and bolstered manufacturing and services in a vote of confidence, it has yet to show its impact on prices, growth and lending, as geopolitical tensions threaten to undermine the recovery.

“Speculation about an asset-purchase programme from the ECB is likely to gain further traction,” said Benjamin Schroeder, an interest-rates strategist at Commerzbank in Frankfurt.


Euro Topics: Russia must pay former shareholders of oil giant Yukos US$50 billion in damages. It was announced on Monday that The Hague's Permanent Court of Arbitration had already handed down this ruling in mid-July. Moscow has said it will appeal the decision. The ruling takes on particular significance in the midst of the Ukraine crisis, commentators write, stressing that Russian taxpayers will have to foot the bill.

Judgement comes in the midst of Ukraine crisis: Coming as it does right in the middle of the Ukraine crisis the ruling also has a political dimension, the liberal business paper Il Sole 24 Ore comments: "Apart from its economic repercussions, which in view of the amount in question are painful even for a giant like Russia, the sentence also has a political dimension. It underscores with unprecedented clarity the illegality of the Russian state and the subservience of the judiciary to the will of the government. And it is doing this at a time in which the flames in Ukraine and the downing of a Malaysian passenger jet coming from Amsterdam have spread fears that Russian imperialism is once more on the rise. There is no connection between the events, nevertheless they bespeak a striking geographic and temporal coincidence in which the Netherlands - involuntarily - plays the leading role."

Russian people will foot the bill: The ruling in the Yukos case is a bitter pill for Russian taxpayers, the left-liberal Dutch daily De Volkskrant fears: "This judgement is a hard and clear signal to the Russian state that violating property rights is a mortal sin. However the sentence comes at a bad time: at the moment the Kremlin can easily divert attention from its own cut-throat capitalism and present it as part of a Western campaign against Russia. The Russian people already see the billions flowing away, and wonder how often they will be robbed of the same money. Because for many Russians [former Yukos boss] Khodorkovsky is a thief who was then robbed by Vladimir Putin and his KGB chum Igor Sechin [chairman of Rosneft, Yukos' former competitor ]. ... A joke by a member of the Russian opposition neatly sums up the fact that the Russian state - meaning the taxpayers - now have to foot the bill: 'Dad, will you drink less now that the price for vodka has gone up? - 'No, my boy. You'll all eat less.'"

Israel too aggressive in Gaza conflict: Israel is being disproportionately aggressive in the Gaza conflict, the pan-African weekly magazine Jeune Afrique writes, and criticises the indifference of Western states: "Does Israel have the right to defend itself? Of course. But it is committing a massacre. There is no other word for the military operation currently taking place in Gaza. Elsewhere it would be met with much more vehement protests and considerably more sympathy. But Palestinian lives seem to be less valuable than others, and it seems Israel stands above everything - including international law. Worse: this butchery is going completely unpunished. And all we hear from Western governments are cautious calls for more moderation or 'restraint', as Angela Merkel put it. What should be done? A ceasefire is of course necessary, but not sufficient. However one thing is clear: Israel will never live in peace if the Palestinians do not live in freedom."

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